The Latest Installment Of: Politicians Just Don’t Get It

Filed under: Market Comentary

Rumors were flying months ago, and now it looks like it’s going to happen… today’s topic is further proof that politicians are focused on votes and that’s all that matters. The recent announcement is that California has green-lighted checks up to $1,050 (depending on your income) for inflation relief.

Our politicians think it’s a smart idea to give people more money to offset inflation. Huh?!

ECON 101: Compounding the Economic Problems

You don’t need to be a PhD in economics to understand that putting more money into the economy (especially money people didn’t work for), it is an inflationary issue. This approach is compounding the problem, not helping the problem.

Now, I realize these checks will give money to people who are struggling. But we need to look at ECON 101: more money pumping into the economy will result in more inflation. It’s as simple as that.

I realize that it’s not specifically real estate related (although inflation definitely plays a role in the real estate industry). The part that pushed me over the edge to talk about this on a video is that California’s new $.03/gallon gas goes into effect soon. So, the government is giving out more money, but also jacking up the price of gas at the same time.

Of course, $.03/gallon won’t have a huge impact on anyone. For a 20-gallon tank, we’re talking about less than a dollar of impact. But it still sends mixed messages.

California Politicians are Buying Your Vote

If you have any questions about whether California politicians are looking to buy your vote, remember this conversation when you get your check in the mail. Be cynical about the money, because these checks are actually compounding the problem and will make the problem worse in the long run.

It’s great that these checks might have some short-term benefits. Enjoy spending the money right now. And I hope it makes a difference for some people, especially since prices are so significantly more expensive right now.

Instead of giving people more money to spend more, the real solution is to do something that will actually lower prices. That’s my $.02. If someone sees it different, I would love to hear from you! Also, reach out any time if you have questions about your personal financial situation and need help buying a home.

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